VIetnam's central bank has approved a merger between HD bank and DaiA Bank, an official said on October 27, a day after the two banks refused to confirm the move.

To Duy Lam, director of the State Bank of Vietnam's Ho Chi Minh City branch was quoted by Vietnamnet as saying that the M&A deal, if it happens, was "voluntary."

HD and DaiA Banks are operating well and are not among the nine banks in poor standing that are being forced to restructure, Lam said.

"I think the merger between DaiA Bank and HD Bank should be considered normal, as after the merger they will become one better bank," Lam added.

Officials from HD Bank and DaiA Bank on Oct. 26 did not confirm news about the M&A deal, which some newspapers reported on Oct. 23.

The two banks had said earlier that they both planned to hold a press conference to announce their restructuring plans and new profit targets at the end of October.

HD Bank Chairwoman Le Thi Bang Tam on Oct. 26 told local media that the lender was considering some "cooperation possibilities" with other credit institutions.

Quach Van Duc, chairman of DaiA Commercial Joint-Stock Bank based in the southern province of Dong Nai said the same day that many credit institutions had sought mergers and acquisitions with his bank but it had "yet to make any decisions."

The central bank governor Nguyen Van Binh said in early June that nine troubled banks had been asked to implement restructuring plans.

The move was part of the central bank's plan to restructure the whole sector through mergers and acquisitions of weak banks burdened by massive amounts of bad debts.